Keeping up with a market that is rapidly shifting to virtual sales can be a bigger challenge for some Indiana retailers than for others. The worst-case scenario that you could face is a sharp decrease in sales that leads to the need to declare bankruptcy. Is this a growing phenomenon?
A news article by Business Insider points out that the number of retail stores that defaulted was much higher in the first quarter of 2018 compared to the previous year. One problem that they discuss is how there is a shift happening towards online sales, yet there is an oversaturated market for retail storefronts.
In another article, Retail Dive has pointed out a dozen retailers who have a low enough credit risk rating to indicate that they are highly likely to file for bankruptcy in 2019. If you own a retail business, it is worth looking at the specific situations that these companies face so you can avoid making the same mistakes.
It is also important to make sure that if you do end up filing for bankruptcy, that you make a plan to prevent it from happening again. A couple of the retailers mentioned in the article have had to file for bankruptcy twice within a two-year period.
To answer the question as to whether retail bankruptcies are trending upward, the answer is that it is hard to tell this early in the year. The year of 2018 saw more retailers defaulting than ever before, but 2019 is only half over.
This article is meant to inform you about retail bankruptcy and should not be viewed as legal advice.